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Stocks A and B have the following probability distributions of expected future returns: a. Calculate the expected rate of return, rB,for5 tock B(A=14.20%.) Do not round intermediate calculations. Round your answer to two decimal places. % b. Calculate the standard deviation of expected returns, OA, for 5 tock A ( OD=19.43%.)Donotroundintermediatecalculations.Roundyouranswertotwo decimal places. Now calculate the coefficient of variation for Stock B. Do not round intermediate calculations. Round your answer to fwo decimal places. Is it possible that most investors might regard Stock B as being less risky than 5 tock A ? 1. If Stock B is more highly correlated with the market than A, then it might have the same beta as Stock A, and hence be just as risky io a portfolio sense. 11. If Stock B is less highly correlated with the market than A, then it might have a lower beta than Stock A, and hence be less risky in a gortfolio sense. IIt. If Stock B is less highly correlated with the market than A, then it might have a higher beta than Stock A, and hence be more risky in a portfolio sense. T. Uf Stock B is more highly correlated with the market than A, then it might have a higher beta than Stock A, and hence be less riaky in a portfolio sense. V. If Stock B is more highly correlated with the market than A, then it might have a lower beta than 5 tock A, and hence be less risky in a portfollo sense c. Assume the risk-free rate is 4.5\%. What are the Sharpe ratios for Stocks A and B?Do not round intermediate calculations. Round your answers to four decimal places. stock A: Stock D: Are these calculabions consistent with the information obtained from the coeficient of variation calculations in Part b? 1. In a stand-alone risk sense A is more risky than B. If Stock 8 is less highly correlated with the market than A, then it might have a lower beta than Stock A, and hence be less risky in a portfolso sense. 11. In a stand-alone risk sense A is more risky than B. If Stock B is less highly correlated with the market than A, then it might have a higher beta than Stocik

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